August 21, 2012


NY: Goldman Sachs Looks to Turn a Profit on Program to Fight Recidivism. Earlier this month, New York Mayor Michael Bloomberg announced the first-ever “social impact bond” in the United States. The bond, between the city of New York and investment giant Goldman Sachs, will finance a behavioral treatment program for incarcerated adolescents on Rikers Island. Unlike a traditional revenue bond, a social impact bond will pay a dividend only if the target outcomes are met—in this case, that the recidivism rate among the youth treated falls by 10 percent. If it does even better, Goldman Sachs will turn a small profit—with the city footing the bill. The Nation

NE: Privatization fails: Nebraska tries again to reform child welfare.… Nebraska isn’t the only state to try privatizing its child welfare system. Florida and Kansas, to differing degrees, launched such efforts in the recent past. But the Nebraska experiment serves as a cautionary tale for any public system considering outsourcing, especially those dealing with the welfare of vulnerable people…Across the board, lawmakers, foster parents and child advocates now say Nebraska’s privatization effort failed because it was ill-conceived, rushed, and inadequately funded. They also say often the caseworkers hired by the private companies had caseloads that were too heavy and in many cases did not have enough training to deal with the complexities of the welfare system.  Center for Public Integrity

PA: Opinion: Allentown City Council should reject water, sewer lease plan.…Although Allentown’s main objective would be to obtain a large concession fee to meet the pension costs by leasing the right to our water and sewer systems, the idea that the fee is low-cost or free money is based on a misconception. Any upfront payment that the city would receive is an expensive loan that the community will have to repay through their water bills. For taxpayers, a water system lease merely shifts the burden from one biller (the city) to another (the private company), and the private operation tends to be more expensive than the public operation. According to Food & Water Watch, of the 10 largest known sales of municipal water or sewer systems to for-profit companies, water bills in these communities had nearly tripled on average after 11 years of private control.  The Morning Call

IN: Indiana Public Schools Wage Unusual Ad Campaign To Keep Students From Leaving For Private Schools In Voucher Program.  Struggling Indiana public school districts are buying billboard space, airing radio ads and even sending principals door-to-door in an unusual marketing campaign aimed at persuading parents not to move their children to private schools as the nation’s largest voucher program doubles in size. The promotional efforts are an attempt to prevent the kind of student exodus that administrators have long feared might result from allowing students to attend private school using public money. If a large number of families abandon local districts, millions of dollars could be drained from the state’s public education system…The Indiana voucher program, passed by the Legislature in 2011, is the biggest test yet of an idea sought for years by conservative Republicans, who say it offers families more choices and gives public schools greater incentive to improve. But school officials worry about the potential loss of thousands of students, especially those from the middle class, and the state money that comes with them.  Huffington Post

OR: Editorial: Privatizing ambulance faces major problems. It has been proposed that privatization of a portion of the local ambulance service be considered. The Community  Public Safety Advisory Committee has been presented such an option by the local air ambulance company. It is good that this proposal will spark a committee discussion of the state of ambulance service countywide, but privatization of ambulance service raises some serious questions for the committee and the public to address.  Herald and News

Democrats target Ryan on Social Security. Democrats are eagerly renewing their fight against privatizing Social Security now that Republican presidential candidate Mitt Romney has picked Paul Ryan as his running mate. It was a fight that did not go well for the GOP when President George W. Bush pushed the idea in 2005.  In his 2010 “Road Map for America’s Future,” Ryan proposed a plan to allow younger workers to divert more than one-third of their Social Security taxes into personal accounts that they would own and could will to their heirs.  Philadelphia Inquirer

Privatizing Public Schools. Private firms see the opportunity and are increasingly traversing into the public school system. Venture capital transactions in the K-12 sector skyrocketed to a record $389 million last year, from just $13 million in 2005, according to Reuters. The deals represent an effort to outsource items like math and special education to private firms. A number of districts, such as Philadelphia’s public schools, have also hired private consultants for advice on improving their systems. Yet the privatization trend is wrought with controversy. Firms see K-12 education as a profitable field, while educators are torn between whether the influx of equity will optimize learning or limit educational autonomy.  Huffington Post